White v. Prince George's County

Decision Date05 June 1978
Docket NumberNo. 67,67
Citation282 Md. 641,387 A.2d 260
PartiesCharles W. WHITE et al. v. PRINCE GEORGE'S COUNTY, Maryland.
CourtMaryland Court of Appeals

Elliot P. DeMatteis, Annapolis (John W. Mitchell, Upper Marlboro, on the brief), for appellants-cross appellees.

James C. Chapin, County Atty. and John R. Gober, Associate County Atty., Upper Marlboro, Michael O. Connaughton, Deputy County Atty., Upper Marlboro, on the brief), for appellee-cross appellant. Argued before MURPHY, C. J., and SMITH, DIGGES, LEVINE, ELDRIDGE and ORTH, JJ.

ELDRIDGE, Judge.

The present case, involving disputes over certain recordation taxes in Prince George's County, arises out of a prior decision of this Court, Prince George's Co. v. White, 275 Md. 314, 340 A.2d 236 (1975), and the General Assembly's response to that decision in Chs. 129 and 142 of the Acts of 1976.

On December 20, 1971, Charles W. White, et al., T/A Penn-Silver Partnership (hereinafter referred to as "White"), had recorded among the Prince George's County land records a deed of trust. On October 11, 1972, the Kenland Corporation ("Kenland") also had a deed of trust recorded among the land records of Prince George's County. Recordation taxes were assessed and paid on both deeds of trust at a rate of $1.65 for each $500.00, or fractional part, of the debts secured. White and Kenland then presented claims for partial refunds of the recordation taxes to the appropriate agency of Prince George's County. Being unsuccessful, the taxpayers took an appeal to the Board of Appeals sitting as the Appeal Tax Court, which upheld the County Council's decision. Upon White and Kenland's further appeal to the Maryland Tax Court, however, they prevailed, with the Tax Court determining that the proper rate was $1.10 for each $500.00 of the debts secured. Prince George's County then took an appeal directly to this Court, and on June 26, 1975, we affirmed the decision of the Tax Court, Prince George's County v. White, supra, 275 Md. 314, 340 A.2d 236 1 We held that under the provisions of Maryland Code (1957, 1975 Repl.Vol.), Art. 81, § 277(r), applicable only in Prince George's County, $1.10 for each $500.00 debt was the correct recordation tax rate in that county. 2

In response to the decision in Prince George's Co. v. White, supra, the General Assembly at its 1976 session passed as emergency legislation, and the Governor signed into law, Chs. 129 and 142 of the Acts of 1976. See Blumenthal v. Clerk of Cir. Ct., 278 Md. 398, 406 n. 4, 365 A.2d 279, 284 n. 4 (1976).

Chapter 142, which was prospective in its operation, taking effect from the date it was enacted into law, among other things amended Art. 81, § 277(r), to provide that the recordation tax rate in Prince George's County, absent a resolution or ordinance by the county, should be $1.65 for each $500.00 of consideration or secured debt. Chapter 142 also amended Art. 81, § 277(q), to make it clear that Baltimore City and all of the counties could by resolution or ordinance fix the recordation tax rate and that the rates specified in various subsections of § 277 applied only in the absence of such local resolution or ordinance.

Chapter 129 of the Acts of 1976, the meaning of which is at the heart of the controversy in the instant case, set forth in § 1 "the legislative intent" that since 1968, when subsection (q) of Art. 81, § 277, became effective, the recordation tax rate fixed by resolution or ordinance of a subdivision superseded the tax rate specified for that subdivision in "any other subsection" of § 277. Section 2 of Ch. 129 "ratified, confirmed, and validated" the authority to collect recordation taxes pursuant to local resolutions or ordinances on or after July 1, 1968. The second paragraph of § 2 went on to state that the section was not intended to apply to actions "which are res judicata" or "whenever constitutionally protected rights would be impaired." 3

The present litigation was instituted in 1976 when White and Kenland filed a four count declaration in the Circuit Court for Prince George's County.

In Count I, the plaintiffs alleged that on April 30, 1974, they recorded a Deed of Trust among the Prince George's County land records and paid a recordation tax at the rate of $1.65 for every $500.00 of consideration. They asserted that the tax at the $1.65 rate was erroneously assessed and collected, as the maximum tax rate then allowed by law was $1.10 for every $500.00 of consideration. The plaintiffs further stated in Count I that on December 2, 1975, they filed with the Prince George's County Office of Finance a claim for $528.00 partial refund, which amount represented the excess tax paid because of the higher rate. They stated that the Office of Finance has taken no action on the claim for a refund, neither granting or denying it. The plaintiffs acknowledged in Count I that they had not pursued the administrative remedy provided by statute for tax refund claims. Nevertheless, the plaintiffs asserted that, because the facts and issue were identical to those involved in Prince George's Co. v. White, supra, except for the particular instrument recorded, and because Prince George's County has refused to make payment in that case in accordance with the decision of the Court of Appeals, they were not required to pursue and exhaust their administrative remedies. The plaintiffs demanded judgment for $528.00, the amount of tax illegally collected on the instrument recorded by them on April 30, 1974.

In Count II of their declaration, the plaintiffs incorporated all of their allegations set forth in Count I, and asserted that the actions of Prince George's County in connection with the tax on the deed recorded on April 30, 1974, deprived the plaintiffs of their property without due process of law in violation of the Fifth and Fourteenth Amendments to the United States Constitution and Articles 14, 19 and 23 of the Maryland Declaration of Rights. Furthermore, in both Count I and Count II, the plaintiffs claimed to be suing on behalf of all other persons similarly situated, and demanded judgment in the additional amount of $10,000,000.00 on behalf of such class of persons.

Counts III and IV of the declaration related to the very same deeds and recordation taxes involved in Prince George's County v. White, supra, i. e., the deeds recorded on December 20, 1971, and October 11, 1972. In those counts, the plaintiffs recited the history of Prince George's Co. v. White, supra, and reiterated that Prince George's County had refused to pay the amount of the refund which the Tax Court and this Court determined in White was due them. In the White case, the Tax Court had ordered that the plaintiffs "be entitled to a partial refund" in recording taxes, totaling $2,953.75. In Counts III and IV of the declaration in the instant case, the plaintiffs sought to reduce the order of the Tax Court, affirmed by this Court in the White case, to judgment.

Thereafter, the plaintiffs White and Kenland moved for summary judgment and the defendant Prince George's County filed a demurrer to the declaration. On June 30, 1976, the circuit court (Bowie, J.) filed an opinion sustaining, without leave to amend, the demurrer to Counts I and II on the ground that the plaintiffs had failed to follow the administrative and judicial remedies provided by statute for the refund of recordation taxes. The circuit court overruled, as lacking merit, Prince George's County's demurrer to Counts III and IV. Following Prince George's County's pleas to the declaration and to the motion for summary judgment, the circuit court (Blackwell, J.) filed another opinion, granting the plaintiffs' motion for summary judgment with respect to Counts III and IV.

The plaintiffs took an appeal to the Court of Special Appeals from the circuit court's order sustaining the demurrer to Counts I and II, and Prince George's County filed a cross-appeal from the summary judgment in favor of the plaintiffs on Counts III and IV. Before any further proceedings in the Court of Special Appeals, this Court granted Prince George's County's petition for a writ of certiorari. For the reasons which follow, we uphold the rulings of the circuit court.

(1)

Counts I and II The Plaintiffs' Appeal

The Maryland Legislature has in Art. 81 of the Code, §§ 213-219, provided a comprehensive remedial scheme for the refund of taxes erroneously paid. Under § 215, if anyone erroneously or mistakenly pays to a state, county or municipal agency more for special taxes than was properly and legally payable, he is authorized to file a written claim for a refund and is entitled to a hearing. Section 216 provides for the allowance or disallowance of the claim by the government entity involved after investigation and hearing. If a claim is disallowed, or if it is not acted upon within six months from the date of filing, § 217 sets forth the administrative remedy of an appeal to the Maryland Tax Court, together with judicial review of the Tax Court's decision:

" § 217. Same Appeals.

"The person filing a claim for refund shall be entitled to appeal from any final action taken under the provisions of § 216 of this subtitle in disallowing any claim for refund, in whole or in part, to the Maryland Tax Court, and from the action of the Maryland Tax Court may appeal to the courts of this State, in the same manner as appeals are permitted from any other action of the Maryland Tax Court under the provisions of this article. If a claim for refund is neither allowed nor disallowed within 6 months from the date of filing of the claim, the claim may be deemed by the person filing it to have been finally disallowed and such person may file an appeal to the Maryland Tax Court under this section."

This statutory remedy "applies to 'any' special tax without regard to the statute imposing it," including a recordation tax, Latrobe v. Comptroller, 232 Md. 64, 70, 192 A.2d 101, 104 (1963). See also Tax Comm. v. Power...

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